Everyone says bonds are a good thing for investors. What exactly is it?
Bond is an IOU, which is commonly referred to as an IOU. With this IOU, the borrower can be asked to pay you interest and principal according to the time and method agreed on the IOU. IOU can be used for trading and purchase, and those who purchase IOU can obtain the principal and interest paid by the borrower. Once the IOU is sold, the debt has nothing to do with the borrower.
For example, if A lent B 10,000 yuan, B wrote an IOU and promised to repay the 10,000 yuan in one year. However, because the time is relatively long, B promised to give A 50 yuan a month as interest during this year. After only half a year, A was eager to sell the IOU to C for 10,000 yuan, and C became B's borrower. The remaining interest of 300 yuan and principal of 10,000 yuan will be repaid by B to C. Therefore, we understand that the existence of "interest" makes bond investment a fixed income investment with the advantage of relatively stable returns.
Classification of bond funds
Bond funds refer to funds that stipulate that more than 80% of the fund assets must be invested in fixed income products. We know that investment returns are often matched with investment risks. Generally speaking, the expected returns of bond funds are lower than those of mixed funds and stock funds and higher than those of money funds; and correspondingly, the risks are lower than those of mixed funds and stock funds and higher than those of money funds, which is a relatively "discount" stable financial management choice.
Bond Fund is actually a big family with a large number of people. For example, according to the classification of investment objects, it can be divided into: interest-rate bond funds, credit bond funds, and convertible bond funds;
can be divided into long bond funds and short-term bond funds according to the investment term;
According to whether the investment target of the fund product will be invested in stocks, bond funds can be divided into the following two categories: 1) Pure bond funds: main investment in bonds and not invest in stocks. According to the average maturity of investment bonds, it is divided into short-term bond funds, medium- and long-term bond funds, and long-term bond funds. 2) Mixed bond funds: In addition to investing in bonds, you can also invest in a small number of stocks. Here it can be divided into primary bond funds - they can only participate in stock market investment through new stock subscription; secondary bond funds - they can participate in stock secondary market and convertible bond investment.
Generally speaking, short-term bond funds invest in short-term bonds shall not be less than 80% of non-cash fund assets, with relatively low volatility and are more favored by stable investors.
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